Trade war tariffs push up prices in China of BMW’s US-made X5 and X6 SUVs

German carmaker BMW said it would raise the prices of two US-made crossover sport-utility vehicles in China to cope with the extra cost of tariffs on US car imports into the world’s biggest automobile market.

In a move due to take effect on Monday, BMW said in a statement on the weekend that it would increase maker-suggested retail prices of the popular, relatively high-margin X5 and X6 SUV models by 4 per cent to 7 per cent.

The rates of increase suggest that BMW is willing to absorb much of the higher costs stemming from bringing the SUVs to China from its factory in South Carolina, underscoring the fierce competition among luxury car brands in China.

BMW’s move comes after China imposed new tariffs earlier this month on about US$34 billion of US imports, from soybeans and cars to lobsters, as part of a widening trade row.

Beijing, which this year cut tariffs on all cars imported into China, slapped an additional 25 per cent levy on US-made cars as of July 6. As a result, China now levies a 40 per cent import duty on all cars imported from the United States.

“BMW stands for free [trade] but can’t stand still without taking actions to respond to the market changes,” a BMW spokeswoman said in an email.